The shortlist for the world's richest short story prize was announced today with Hanif Kureishi and Jackie Kay heading a list of five contenders.

The National Short Story prize, now in its second year, aims to raise the profile of the rather neglected form in the UK with a first prize of £15,000, a runner-up prize of £3,000 and awards of £500 for the rest of the shortlist.

The chair of the judges, Mark Lawson, saluted the breadth and depth of the shortlisted entries.

"This prize exists partly because many - perhaps even most - publishers and literary editors still regard the novel as the most important form of story-telling and are suspicious of short stories," he said. "But this year's selection makes very clear that there is no connection at all between word-count and the scale of subject matter or characterisation that can be achieved."

"The stories from which we chose the shortlist represented an impressively wide range of genres, subjects, cultures and ages," he continued. "The places visited range from Tyneside via the Middle East to San Salvador and the issues covered include terrorism, religion, and death, asserting the absolute importance of storytelling on this scale "

Kureishi's Weddings and Beheadings takes the reader into the mind of an unwilling participant in terrorist executions, while Kay uses gallows humour to explores a dark day in Glasgow in How to Get Away with Suicide.

Julian Gough delves into Irish myths in The Orphan and the Mob, Jonathan Falla's The Morena travels to El Salvador's dirty war in the 1980s while David Almond evokes a childhood on Tyneside in Slog's Dad.

Another of the judges, Monica Ali, was keen to stress the year-round nature of the project, telling the Today programme "it's not just about the once a year big bucks".

"There's a year-round campaign to involve readers and writers through libraries, festivals and book clubs," she explained.

Last year's winner, James Lasdun, is convinced that the prize is beginning to put the short story on the map.

"I was honoured and delighted to win the first ever National Short Story prize," he said. "I think it's fantastic that the award is finally helping to bring the short story the recognition it deserves in the UK."

Each of the five stories will be broadcast on Radio 4 next week, and the overall winner will be announced on Monday April 23.

Mark Lawson and Monica Ali will be joined on the judging panel by the novelist AS Byatt, the BBC's Di Speirs and the associate editor of Prospect magazine, Alex Linklater.